New charges anger small businesses

INDEPENDENT supermarkets and newsagents are among those most vocal about the new EFTPOS charges that came into effect on the first of this month.

The new Eftpos Payments Australia Limited (EPAL) fees mean traders incur a five-cent fee for every transaction over $15. Previously there was no charge.

There will be no fee for transactions under $15. What is charged will be done via the retailer's bank. And while it compares well to the 12-cents per transaction charge for using credit cards, small business is up in arms.

Australian Newsagents Federation CEO Alf Maccioni described the new model as an "EFTPOS tax", arguing the fees will cost consumers and small businesses in excess of $150 million annually.

He said many small businesses bearing the brunt of the charges will have no choice but to pass it on to customers.

Another twist in the tale involves EPAL's members, who include the major banks, Coles and Woolworths. They manage their own terminals and can opt out of the new charges.

"This completely removes the previous level playing field for Australia's thousands of small businesses, including our community newsagents," he said.

"Coles and Woolworths will continue to receive a rebate and get a further leg up to increase their market advantage over struggling small businesses."

An EPAL spokesperson told Better Business last week the two big supermarket giants were among the first to invest in the original EFTPOS system when it was introduced in the 1990s.

They funded their own payments infrastructure and acted essentially like an acquiring bank. The spokesperson could not say which members would opt in or out of taking on the charges.

A March press release said the new fee structure was brought in to strengthen competitiveness and encourage investment in EFTPOS to fund enhancements like chip technology for secure, contactless and mobile payments.

EPAL managing director Bruce Mansfield, who refused to be interviewed for this story, previously said EFTPOS remained a cheaper transaction option for merchants, with 25% of EFTPOS transactions below $20 and the reverse interchange fee at -15 cents, meaning merchants have an incentive to provide cash out.